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Compose a 1000 words assignment on international product life cycle. Needs to be plagiarism free!
Compose a 1000 words assignment on international product life cycle. Needs to be plagiarism free! The firm with the innovative product serves the home market first and then exports the product to foreign markets. This point can be clearly supported by the following statement. Many of the products found in the world's markets were originally created in the United States before being introduced and refined in other countries. In most instances, regardless of whether a product is intended for later export or not, innovation is initially designed with an eye to capture the U.S. market, the largest consumer nation.
In the second phase, production starts in foreign countries either through licensing or re-engineering of the product. Importing countries in the initial stages, generally, wealthy countries import innovative products gain product familiarity. As product familiarity increases, demand in the foreign markets expands. This attracts more players and results in manufacturing in foreign countries. (Hill W.L) This production in foreign countries slowly replaces exports of the innovative firm.
In the third phase, firms manufacturing in foreign countries gain production experience and move down the cost curve. Sometimes they manage to produce the goods at a lower cost than is possible for the innovative firms.
